Kathleen Carey 
c/o 5152 Sepulveda, Suite 205 
Sherman Oaks, California (18 U.S.C. 1342) 
818-789-0954 

Stephen Mitchell, Kathleen Carey 
In propria persona (NOT PRO SE) 

ORIGINAL  FILED 
AUG 07 1998 
LOS ANGELES 
SUPERIOR COURT 

In the superior court[1] 
for Los Angeles county, California 

________________________________________________________________________________ 
[1] Concurrent with and equivalent to the district court as created in the Constitution of the State of Cailfornia 
of 1849, and the seventeenth judicial district, see Stats 1872, ch. CXIV, p. 116.

vs. 

CHURCH OF SPIRITUAL TECHNOLOGY, 
a corporation doing business as L. Ron Hubbard Library; 
JOHN/JANE DOE, #2-99 
Defendants/Respondents, 

Stephen Mitchell, and Kathleen Carey, (hereinafter, the "Plaintiffs"), allege: 

1. The plaintiffs, and each of them, are now, and at all times mentioned in this complaint have been, one of the people of California, specifically not welfare enumerated, in propria persona and not PRO SE, living on the Land within the boundaries of Los Angeles county, in California, one of the United States of America; with express and explicit reservation of all Vested Natural, Inherent, and Common Law Rights, whether enumerated or not in the Constitution for the State of California of 1849; specifically and expressly not within the venue and/or jurisdiction of the quasi-constitution of 1879 based on the document entitled "Affidavit of Truth in Support of Verified Complaint for Libel" filed concurrently with the Verified Complaint and incorporated as if fully restated herein; specifically and expressly not within the venue and/or jurisdiction of Penal Code, the Code of Civil Procedure, the Political Code, and the Civil Code, alleged to have been enacted in 1872; nor any amendments or additions to any of the original four divisions of the code[2]; without representation of any attorney-at-law. 
 

________________________________________________________________________________ 
[2]The codes were never given "chapter numbers" and were therefore never published as part of the Statutes 
of California. The text of the four original Codes, Senate Bills 221, 360, 375, arid 430, cannot be verified. It 
cannot be determined whether the handwritten changes on said bills were made before or after the Governor 
signed them.

________________________________________________________________________________ 
[3] All exhibits previously exhibited in documents already in the file of Case No. BC 175 367 are referenced as 
such and incorporated herein as if exhibited herein. We do not wish to overburden the Court with paperwork 
that is already in the file.

4, The Plaintiffs hereby declare, as a matter of law, that this First Amended Verified Complaint has been filed in the venue of Los Angeles county as established by statute under the authority of the Constitution for California of 1849 at Stats 2853, ch. LXXVIII, p. 119, and therefore within the seventeenth judicial district as established by statute at Stats 1872, ch. CXIV, p. 116. It shall be construed for the purposes of this case that the superior court for Los Angeles county is concurrent with and equivalent to the seventeenth judicial district of the district court as created in the Constitution of the State of California of 1849. The Plaintiffs hereby declare that the failure on the part of the Defendant, or the Court, to have presented evidence that any of the foregoing is not true, is thereby deemed as a matter of law, that estoppel by silence is thereby invoked, and establishes express agreement with the Plaintiffs as to the venue within which this case will be adjudicated. 
 

5. As a matter of law, the foundation of the jurisdiction of this case, is established by Stats. 1850, ch. 95 which expressly states: 
 

"The Common Law of England, so far as it is not repugnant to or inconsistent with the Constitution of the United States, or the Constitution or law of the State of California, shall be the rule of decision in all the Courts of this State." 

7. It has been settled as a matter of law that when the rules of common law are not repugnant to organic or state law, the court cannot "... adopt a rule other than that established by the common law". Lux v. Haggin, 69 Cal 255, at 261. 

8. Based on Lux v. Haggin, supra., in order for the court to apply any rule of decision other than that of the common law, the court would necessarily be required to establish and prove that the rules of common law which would ordinarily apply to the relief herein sought are repugnant to the organic or state law. Since repugnant means "extremely distateful" or "contradictory", if an actual repugnance was in existence, it could be clearly shown and established. Legal evidence of Lux v. Haggin, 69 Cal 255, in the form of an original volume of 69 California Reports has been produced in open court by the Plaintiffs on April 7, 1998, and the position of the Plaintiffs was not controverted by the Court or the Defendant, 

9. The California Supreme Court has ruled that "... where the code is silent, the common law governs." Estate of Apple, 66 Cal. 432. Legal evidence of Estate of Apple, 66 Cal. 432, in the form of an original volume of 66 California Reports was produced in open court by the Plaintiffs on April 7, 1998, and the position of the Plaintiffs was not controverted by the Court or the Defendant. 

10, The Plaintiffs hereby declare, as a matter of law, that all twenty-nine (29) divisions of the California Code are silent. This is an indisputable fact in that the original four divisions of the code were never assigned chapter numbers and were never published as part of the Statutes Of California 1871-2. Legal evidence of the Statutes of California 1871-2, in the form of an original volume of the Statutes of California 1871-2, was produced in open court by the Plaintiffs, and the position of the Plaintiffs was not controverted by the Court or the Defendant. 

11. Stats 1872, ch. CCCL was required in order to authorize the Secretary of State, via the State Printer, to publish the codes. The codes would have automatically been published in the Statutes of California 1871-2 if they had been actual law. It is a fact that every statute passed by the legislature and approved by the governor, or passed by the legislature in override of an executive veto, has been automatically published in the Statutes of California by the Secretary of State via the State Printer. 

12. It is an indisputable fact that within the text of Stats 1872, ch. CCCL, the codes are not referred to as "law" or "statutes". 

13. The Plaintiffs hereby declare that any ruling by the court with regard to this matter that is not made in accordance with the common law, must be accompanied by the express acknowledgment that the ruling is other than a common law ruling due to the fact that the common law rule would be repugnant to the organic or state law of California, as any other manner of ruling shall be construed to be in want of all jurisdiction. 

14. The California Supreme Court ruled in Billings v. Hall, 7 Cal 1, at 13, that even the acts of the most humble magistrate in the state who transcends lawful jurisdiction are utterly void. Legal evidence of Billings v. Hall, 7 Cal 1, in the form of an original volume of 7 California Reports, was produced in open court by the Plaintiffs on April 7, 1998, and the position of the Plaintiffs was not controverted by the Court or the Defendant. 

15. The Ninth Circuit Court of Appeals ruled in Johnson v. MacCoy, 278 F2d. 37 that when a judicial officer does an act in clear absence of jurisdiction, and knows of the absence of jurisdiction, judicial immunity is pierced. 

16. The superior court for Los Angeles county is hereby given actual notice that as a matter of law, the Common Law of England, where it is not repugnant to the organic or state law of California, shall be the rule of decision with regard [to] all issues of law raised in this First Amended Verified Complaint. Any ruling asserted by the superior court for Los Angeles county alleged to be pursuant to any of the California Code, shall been deemed to have been asserted in want of all jurisdiction and the appropriate remedy will be sought by the Plaintiffs. 
 

17. The Code of Civil Procedure, for example,claims to have been "enacted 1872". The Plaintiffs hereby declare that it must be noted that it does not state its origin in the manner of "Stats. 1872, ch. ???". This is significant because every valid Statute of California has a reference to its origin in the manner of "Stats (legislative year), ch. (number)". This method began with Stats 1850, ch. I (see Exhibit 2), and has continued since. This is due to the constitutional mandate found at Article V, Section 19, where it states, "The Secretary of State shall keep a fair record of the official acts of the legislative and executive departments of government, ..." (see Exhibit 3). 

18. The Plaintiffs hereby declare that it is an indisputable fact that the original four divisions of the California Code were not assigned chapter numbers, and were never made a part of the Statutes of California. The Plaintiffs presented an original volume of the Statutes of California 1871-2 as indisputable evidence that the code was never published as a part thereof in open court on April 7, 1998 and the position of the Plaintiffs was not controverted by the Defendant or the Court. 

19. The Plaintiffs hereby declare that Stats. 1872, ch. CCCL [350] (see Exhibit 4), is of indisputable significance. This statute granted the Secretary of State legislative permission to publish the code. Nowhere within Stats. 1872, ch. CCCL is the code referred to as being law. It was in fact self-declared in the Political Code at section 4494 (see Exhibit 5) that it could not be published as part of the statutes. 

20. Stats 1870, ch, DXVI (see Exhibit 6), created a commission with authority to revise and compile the statutes of this state. 42 California Law Review, 766 at page 773 (see Exhibit 7), acknowledges that it was well known at the time that the commission went beyond any delegated authority. 

21. In 22 Law Library Journal, 8 at page 19 (see Exhibit 8), the following facts are revealed: 
 

The Civil Code of California as originally adopted was the Field draft code from New York, and was patterned after the Code Napoleon. The Penal Code Of California is practically taken from the New York Draft of a Penal code. The Political Code proposed by the Commissioners for New York was the model for the Political code of California. Annotations in Farrell's Code of Civil Procedure cites notes of the California Code Commissioners which frequently included explanatory matters from the Now York Field Code. 

"It must be borne in mind that _this Act does not provide for the adoption of any new system of law, but simply reenacts the existing law._  (italics supplied) 

23. The California Code cannot be viewed as valid law in light of the state constitution at Article IV, Section 25 (see Exhibit 10), which stated: 

"Every law enacted by the Legislature, shall embrace but one object,..." 

25. With the foregoing facts clearly establishing that the original four divisions of the code were never made a part of the Statutes of California, any section  or new division that has been subsequently added to the code, is also not a part of the Statutes of California. 

26. In Billings v. Hall, 7 Cal. 1, at page 13 (see Exhibit 12), the California Supreme Court stated the following fundamental truth: 

"Under our form of government, the Legislature is not supreme. It is only one of the organs of that absolute sovereignty of the people; like other departments of government, it can only exercise such powers as have been delegated to it, and when it steps beyond that boundary, its acts, like those of the most humble magistrate in the state, who transcends his jurisdiction, are utterly void". (bold emphasis added, italic emphasis supplied) 

28, The Plaintiffs are, each of them, one of the people of California. Therefore, in order for the Defendant to controvert any of the foregoing, they would have to present indisputable evidence as to the date and the manner in which the code became part of the Constitutional Statutes of California. 
 

29. On or about February 9, 1997, the Plaintiffs became aware of a printed publication (see Exhibit A to the Verified Complaint) which has apparently been sent out in the mail to various addresses, though the quantity of the names on such a mailing list is unknown to the Plaintiffs. This "mailing list" will be demanded by the Plaintiffs on discovery. 

30. Said publication has a heading which distinctly identifies that it is a "SPECIAL BRIEFING" of the "Office of Special Affairs International, an organization of the Church of Scientology (hereinafter "Church"). 

31. Said publication displays the following at the bottom of the third page (see Exhibit A to the Verified Complaint): 

A. "(c) 1997 CSI"; 

B. Acknowledges permission from the "Religious  Technology Center" to use the trademarks of "SCIENTOLOGY", "LRH", and the "Scientology Cross"; 

C. Acknowledges permission from the L. Ron Hubbard Library for permission to reproduce selections from the works that are (c) L. Ron Hubbard Library. 

"No mailing may be made without a complete sample of the entire mailing being okayed..." 

and 

"No booklet or brochure may be given or handed out without being okayed for that specific purpose..." 

and 

"That a booklet or brochure exists or has been printed is not an okay for its general use. Any printed booklet or book must be okayed before being used for a specific purpose..." and, finally, 

"All permissions granted are for a specific use of the material..." (see Exhibit 13) 

33. In the Declaration of Sherman D. Lenske, dated February 4, 1986 (see Exhibit 14), Mr. Lenske states, "In 1965, I assisted in drafting a new pour-over Will for Mr. Hubbard, which was executed on January 23, 1986 and is his last Will and Testament." 

34. The Last Will and Testament of L. Ron Hubbard, executed on January 23, 1996 (see Exhibit 15), established Norman F. Starkey as the Executor of said Will and as Trustee of the Author's Family Trust-B, also created on January 23, 1966, and which received the rights, title and interest in copyrights, trademarks and service marks created by L. Ron Hubbard prior to January 1, 1978, 

35. Subsequently, Norman F. Starkey as Trustee of Author's Family Trust-B filed a Fictitious Business Name Statement with the County Clerk's Office registering the name L. Ron Hubbard Library in 1986. On January 30, 1989, Norman F. starkey as Trustee of Author's Family Trust-B once again filed a Fictitious Business Name Statement with the County Clerk's office registering the name L. Ron Hubbard Library. Sherman D. Lenske of Lenske, Lenske & Heller, 6400 Canoga Ave., Suite 315, Woodland Hills, California, is named on this Fictitious Business Name Statement in the "return address data field" (see Exhibit B to First Amendment to Complaint). 

36. In the Declaration of Church of Spiritual Technology (hereinafter "CST"), dated February 4, 1986 and executed by Daniel J. Przybylski (see Exhibit 16), Mr. Przybylski states that the Church of Spiritual Technology is the principal beneficiary of the Author's Family Trust-B. 

37, On December 27, 1993 CST filed a Fictitious Business Name Statement registering the name "L. Ron Hubbard Library" on which Sherman D. Lenske of Lenske, Lenske & Abramson at 6400 Canoga Ave., #315, Woodland Hills, California is named in the "Recording Requested by and Mail to" data field (see Exhibit C to First Amendment to Complaint). 

38. The Articles of Incorporation of CST filed May 28, 1992 with the Secretary of State of California (see Exhibit C to the First Amendment to Complaint), named Sherman D. Lenske of 6400 Canoga Ave., Suite 315, Woodland Hills, California 91367 as initial agent for service of process, as well as the incorporator. 

39. The Plaintiffs hereby allege that the foregoing is indisputable proof that CST, dba L. Ron Hubbard Library, is ultimately responsible for the use and implementation of the Scientology copyrights and trademarks, and that the Defendant CST, and no other, has the ultimate authority to grant permission to use said copyrights and trademarks, and only then for a specific use and for a specific purpose. 
 

40. As one of the people of California, each Plaintiff's right and title to the Inalienable Rights acknowledged in and protected by the Constitution for the State of California of 1849 is indisputable. The Plaintiffs have a right to enjoy their good reputations in their business lives and in their personal lives. The Defendant has caused the loss and destruction of said rights belonging to the Plaintiffs, expressly stated at Article I, Sections 1 and 21, as follows: 

Section 1. All men are by nature free and independent, and have certain inalienable rights, among which are those of enjoying and defending life and liberty; acquiring, possessing and protecting property; and pursuing and obtaining safety and happiness. 

Section 21. This enumeration of rights shall not be construed to impair or deny others, retained by the people. 

41. No one has the right to violate those inalienable rights that are acknowledged in and protected by the Constitution for the State of California of 1849, and the Defendant CST has a legal duty to honor the sanctity of the rights of the Plaintiffs. The Defendant CST, a corporation, whose existence is evidenced by the Articles of Incorporation filed with the Secretary of State of California on June 1, 1982 (see Exhibit C to the First Amendment to Complaint), does not share these rights with the Plaintiffs, and does not have any position where it can lawfully violate the rights of a citizen acknowledged in and protected by the Constitution. This includes the right of protecting property, and as such the good reputations and good names of the Plaintiffs. The officers of Defendant CST, acting in the capacity of officers, do not have the right to ignore or violate the rights of the Plaintiffs, or of any other citizen, which are acknowledged in and protected by the Constitution. 
 

42. The Plaintiffs allege that the publication known as "Public Warning" and exhibited to the Verified Complaint for Libel as Exhibit A, is libel as defined in Black's Law Dictionary, 6th Edition, which states: 

Libel. A method of defamation expressed by print, writing, pictures, or signs. In its most general sense, any publication that is injurious to the reputation of another. A false and unprivileged publication in writing of defamatory material 

A maliciously written or printed publication which tends to blacken a person's reputation or to expose him to public hatred, contempt, or ridicule, or to injure him in his business or profession... 

Accusation in writing or printing against the character of a person which affects his reputation, in that it tends to hold him up to ridicule, contempt, shame, disgrace, or obloquy, to degrade him in the estimation of the community, to induce an evil opinion of him in the minds of rightthinking persons, to make him an object of reproach, to diminish his respectability or abridge his comforts, to change his position in society for the worse, to dishonor or discredit him in the estimation of the public, or friends and acquaintances, or to deprive him of friendly intercourse in society, or cause him to be shunned or avoided, or where it is charged that one has violated his public duty as a public officer. Almost any language which upon its face has a natural tendency to injure a man's reputation, either generally or with respect to his occupation. 

44. The Plaintiffs' identities and clearly identifiable photographs, among others, appear on the front page of "Public Warning". (see Exhibit A from the Verified Complaint) 

45. The italicized "caption" under the clearly identifiable photographs and identities of the Plaintiffs, and the labels "Tax Evader" on the first page of "Public Warning" reads: "Calling themselves 'tax protestors,' a handful of out-ethics individuals have attempted to use Church lines to promote their off-policy and illegal tax evasion schemes. They are in fact engaged in criminal activities..." 

46. The Plaintiffs allege that the intent of those statements, by proximity and insinuation, is to defame the Plaintiffs. Although the Defendant has attempted to characterize "Public Warning" as a general treatise on taxes which would encompass matters of public interest to their parishioners, the Plaintiffs aver that the italicized caption beneath the photographs, identities and labels of "Tax Evader" of the Plaintiffs on page 1 is merely a restatement of paragraph 1 on page 1 which is a statement of the purpose of "Public Warning." By innuendo, that purpose is to identify the Plaintiffs as the subject of this "Public Warning". Therefore, the Plaintiffs contend that the Defendant cannot claim that the "Public Warning" is of a general nature, but is a specific and libelous attack upon the Plaintiffs. 

47. The very first paragraph makes a specific statement that the Plaintiffs are involved in "illegal" activity. (see Exhibit A to the Verified Complaint) The Plaintiffs allege that this statement is false on the following ground; 

A. The Plaintiffs declare that they are not involved in any illegal activity. 

A. The definition of the term "fact" in the Black's Law Dictionary, 6th Edition, demonstrates that "Public Warning" is clearly and specifically claiming that the "facts" regarding the Plaintiffs and their alleged "illegal" activities are of the following status: 

Fact. A thing done;an event or circumstance; an actual occurrence; ...; that which has taken place. The quality of being actual; actual existence or occurrence. 

"Criminal, n. One who has committed a criminal offense; one who has been legally convicted of a crime; one adjudged guilty of a crime." 

A. The Plaintiffs declare that they have never been convicted of a crime, especially and specifically any type of criminal activity as alleged by "Public Warning", put out and/or approved by the Defendant. 

B. The Plaintiffs declare that they have never been adjudged guilty of any crimes. 

C. The Plaintiffs allege that they are not engaged in criminal activities. 

A. The Plaintiffs, and each of them, hereby declare that they have never made the claim that they are "tax protesters". 

B. The term "tax protester" is used by the Internal Revenue Service to describe people who protest paying "income taxes"[4]. The Internal Revenue Service in fact publishes a six (6) page "FACT SHEET" entitled "TAX PROTESTERS" (see Exhibit B to the Verified Complaint). The Plaintiffs allege that they have never been involved in any of the activities as described in this Internal Revenue Document. 

________________________________________________________________________________ 
[4]The Plaintiffs believe that it is correct to presume that the Defendant intended for the information and alleged "facts" in the libelous publication to be referring to "income taxes" adminsitered by the Internal Revenue Service, due to the fact that the four people, named and pictured on the second page of the libelous publication, were  
all either charged, convicted and/or sentenced for allegedly having violated the law with regard to "income taxes" administered by the Internal Revenue Service. 
 
C. The Plaintiffs declare that they have filed all the necessary paperwork with all appropriate taxing agencies. 

D. The Plaintiffs declare that they obey all tax laws which lawfully apply to them. 

E. The Plaintiffs declare that they pay all lawfully levied taxes legislated under positive law. 

F. The Plaintiffs declare that they have not, in fact, violated the tax laws of any of the several states or of the United States of America. 

A. The Plaintiffs declare that they have never tried to involve any Scientologists, or anyone else for that matter, in any scams of any description. 

B. The Plaintiffs allege that they have never encouraged anyone to refrain from paying taxes of any description. 

________________________________________________________________________________ 
[5]A Suppressive Person Declare is the equivalent of an Excommunication and requires that Scientologists disconnect, shun and refuse communication from those so Declared. 
  
A. The definition of suppressive acts as found in the Dianetics and Scientology Technical Dictionary is: "Suppressive Acts, 1. acts calculated to impede or destroy Scn or a Scientologist. (HCOPL 23 Dec. 65)." 

B. It is well documented by the Church that the actions of the Plaintiffs over an extended period of time have aided not only Scientology, but Scientologists (see Exhibit B to the Verified Statement of Demand for Damages of Stephen Mitchell in the Verified Complaint and see Exhibit 17 attached hereto). 

C. The actions of the Plaintiffs at all relevant times, which include the issuing of numerous Knowledge Reports[6] citing violations of Church Policy by management and Queries of Orders[7] demanding references to Scientology policies as foundation for management's actions, have been to preserve and perpetuate Scientology not to impede or destroy it. 
________________________________________________________________________________ 
[6]A Knowledge Report is the form used by Sclentologists to report incidents of violation of technology or 
policy as contained in Hubbard Communication Office Bulletins or HCOPL's. A Scientologist who witnesses  
such a violation and does not issue a Knowledge Report is considered to be guilty of the violation himself. 

[7]A Query of Orders is to be issued by a Scientologist in order to question the foundation in HCOPL's for a questionable order. Once queried, an order is not to be followed until the order is supported by an HCOPL 
in its published form, not verbally. 
 
 D. Actual notice of the intentions of the Plaintiffs were delivered not only in written form to the relevant parties in the Church but also to two different Committees of Evidence, neither of which, contrary to Church policy as published in HCOPL's, ever showed their findings to the Plaintiffs. 

E. The Plaintiffs allege that the "Suppressive Person Declares" were issued without due process as set forth in Church policies and published in HCOPL's. 

A. The Plaintiffs have never used "theta lines of Scientologists" to promote anything other than Scientology, Scientology books and Scientology courses as evidenced by the Commendations issued by the Church to Stephen Mitchell (See Exhibit B to the verified Statement Of Demand for Damages of Stephen Mitchell in the Verified Complaint) and the Commendations issued by the Church to Kathleen Carey (see Exhibit 17) which cover dissemination activities by the Plaintiffs on behalf of the Church spanning two years. 

B. The use of the word "parasite" is especially false, defamatory and malicious given that the Commendation issued by the Church to Stephen Mitchell dated November 4, 1993 states: "Stephen does these seminars everly (sic) two weeks without any personal exchange other than to get people into Scientology." 

C. The definition of the Scientology term "out-ethics", as found in the Dianetics and Scientology Technical Dictionary, is: "1. An action or situation in which an individual is involved contrary to the ideals and best interests of his group. An act or situation or relationship contrary to the ethics standards, codes or ideals of the group or other members of the group." 

D. The libelous nature and innuendo of the term "out-ethics" within Scientology is that of a derogatory epithet. 

E. The Plaintiffs assert that they are not out-ethics, given that their actions are dictated by and conform with policies written by L. Ron Hubbard as published in HCOPL's in the OEC volumes. 

55. On page 1 of "Public Warning", photographs of the Plaintiffs appear, captioned with their identities and the label "Tax Evader." The Plaintiffs allege that the statement made by the juxtaposition of their likenesses, identities and the label "Tax Evader" is false on the following grounds: 

A. The Plaintiffs assert that they have never sought to evade any tax that they are lawfully obligated to pay. 

B. The Plaintiffs have filed the necessary paperwork with the taxing agencies. 
 

57. The title of the libelous publication is "Public Warning." The definition of "Warning" per Black's Law Dictionary, 6th edition, is: 

"Warning. A pointing out of danger. Also, a protest against incurring it. The purpose of a 'warning' is to apprise a party of the existence of danger of which he is not aware to enable him to protect himself against it, 

59. On page 1, the subheading reads: "Subject: Squirrel Tax Avoidance Schemes" juxtaposed with photographs of the Plaintiffs, their identities and the label "Tax Evader." The Plaintiffs allege that the statement made by this juxtaposition is false on the following grounds; 

A. The definition of the Scientology term "squirrel" as found in the Dianetics and Scientology Technical Dictionary is: "2. Those who engage in actions altering Scn, and ofbeat (sic) practices. 

B. The Plaintiffs assert that within Scientology the innuendo of the term "squirrel" is not only a derogatory epithet, but within the Scientology community, it is the worst accusation one can make of another. 

C. The Plaintiffs assert, and their reports will document, that the entirety of their actions has been to keep Scientology standard and to bring attention to the alterations and offbeat practices engaged in by current management, including Defendant CST. 

D. The phrase "tax avoidance" is used and, although the definition for this term is given in Black's Law Dictionary, 6th Edition as: "The minimization of one"s tax liability by taking advantage of legally available tax planning opportunities. Tax avoidance may be contrasted with tax evasion which entails the reduction of tax liability by using illegal means.", it is clear that the innuendo created by the subheading is that tax avoidance is illegal and criminal, 

E. The Plaintiffs allege that the statement created by the innuendo of the words "tax avoidance" above is false and misleading. 

F. The word "scheme" is defined in Black's Law Dictionary, 6th Edition as: 

"Scheme. A design or plan formed to accomplish some purpose; a system... When used in a bad sense, term corresponds with 'trick' or 'fraud'", 

G. The Plaintiffs allege that the statement made by insinuation through the use of the word "scheme" is false. Further, the Plaintiffs assert that they have no interest in, or benefit to be derived from, the tax position of any other citizen or person. Further still, the Plaintiffs assert that they have produced no design or plan or system with regard to taxation which they offer to third parties. 

A. They belong to "a class of people who often call themselves 'sovereign citizens,' or sometimes 'patriots' or 'true patriots.'" (page 1, par. 4) The Plaintiffs assert that they do not consider themselves "sovereign citizens," "patriots" or "true patriots" and have not used those terms to identify themselves. 

B. They "claim that they have removed themselves from the jurisdiction of federal and state laws simply by declaring themselves exempt." (pg. 1, par. 4) The Plaintiffs specifically declare that they are subject to the Constitutional Statutes of California and all positive law of the United States of America. 

C. They "put forward specious arguments..." (pg. 1, par. 4) According to the Random House Dictionary of the English Language "specious" is defined as; "1. apparently good or right though lacking real merit; superficially pleasing; plausible; specious arguments. 2. pleasing to the eye, but deceptive." The Plaintiffs allege the falsity of this insinuation on the grounds that all of the arguments put forth by the Plaintiffs are based upon Statute law and Appellate and Supreme Court decisions, which law and decisions are not considered by the Plaintiffs to be specious. 

D. They give excuses that "are as insane as their criminal activity..." (pg. 2, par. 3), these people are "dislocated from reality..." (pg. 2, par. 11), they "want others embroiled in their insane wars in order to bring them down ... " (Pg. 3, par. 4) and they try to "fool you into getting yourself into trouble by listening to their insanities..." (pg. 3, par. 11) The Plaintiffs allege the falsity of these insinuations on the grounds that they have never been diagnosed as being insane, they have never been committed to any mental institution nor have they ever been under the care or treatment of any psychiatrist or psychologist or mental health technician. Additionally, the Plaintiffs aver that neither the Defendant, nor any representatives of the Defendant, has any professional training in psychiatry, psychology or mental health in order to make such claim of insanity, nor have they referenced the name of any psychiatrist, psychologist or mental health technician in "Public Warning" as a foundation for their statements. Further, the Plaintiffs assert that since these insinuations were made following the statement by the Defendant that they are presenting "facts", the Defendant cannot now argue that they were merely offered as opinions since they were not labeled as such. 

E. These people are "worse than hypocrites..." (pg. 2, par. 7) The Plaintiffs assert that they are not now nor have they ever been "worse than hypocrites" and deem that this insinuation is intended by the Defendant to defame the Plaintiffs. 

F. These people are "revolutionaries . . . " (pg. 2, par . 8) The Plaintiffs allege that they are not revolutionaries and that the entirety of their actions, as documented in reports submitted to Church management and in papers submitted to this Court, is to assert the supremacy of the duly enacted laws of California and of the united States of America. 

G. They "make up all manner of lies in a suppressive and transparent attempt to involve Scientologists in their own illegal and off-policy actions..." (pg. 2, par. 14) The Plaintiffs assert that they have made up no lies, half-truths or "stories" in order to involve anyone in any scam or illegal activity, The Plaintiffs further assert that they themselves are not involved in any illegal activity. 

H. They "are not very bright and are unable to recognize differences, similarities and identities..." (pg. 3, par. 1) The Plaintiffs assert the falsity of this insinuation, and further that it is known to be false by the Defendant who is in possession of I.Q. tests taken by both the Plaintiffs, registering I.Q.'s in the neighborhood of 140 for each of them. 

I. They think they can "dupe others into supporting them..." (pg. 3, par. 1) The Plaintiffs assert the falsity of this insinuation and further allege that they have never "duped" nor solicited "supporters" of any kind. 

"Actual malice. ...In libel law, 'actual malice' can be established either by proving the publication was made with the knowledge of its falsity of its contents or with reckless disregard of whether it was false or not." 

62. On 29 August 1996 the Plaintiff Kathleen Carey issued a "Query of Orders" (see Exhibit 20), a form used to question destructive orders pursuant to policy published in the OEC volumes in HCOPL form. The Query raised the issue of SPD's being used as foundation for off-policy actions on the part of Church management to replace existing organizations, to allow activities that are clearly and unequivocally proscribed by policies as published in HCOPL's and to permit the issue of books and courses "based on the works of L. Ron Hubbard" when HCOPL's s demanded that only the writings of L. Ron Hubbard were to be issued. 

63. The Plaintiffs aver that these two reports, among others of a similar nature issued by the Plaintiffs, point to indisputable proof that current Church management had supplanted the only policy for the Church. and its organizations and that such an action would, per policy contained in HCOPL's be labeled a HIGH CRIME - SUPPRESSIVE ACT[8] resulting in immediate expulsion from the Church if discovered. 

________________________________________________________________________________ 
[8]HIGH CRIME SUPPRESSIVE ACTS are deemed to be transgressions of the highest magnitude Within the 
Church of Scientology and its organizations.

________________________________________________________________________________ 
[9]A Committee of Evidence is an ethics panel convened to investigate allegations of policy violations.

66, The Plaintiffs aver that if the Church were operating on authorized HCOPL's as policy, the existence of Meade Emory as one of the Founders of Defendant CST would not have been possible given that L. Ron Hubbard declared the Internal Revenue Service a "suppressive group" and no member of a suppressive group can participate in Scientology until that group has been disbanded per HCOPL and since Emory is a former Assistant to the Commissioner of the Internal Revenue Service. HCOPL's deny IRS employees and their families access to Dianetic and Scientology auditing (pastoral counseling). Furthermore, no HCOPL would countenance a former IRS official having control and authority over the copyrights, trademarks and advanced technologies of Scientology, 

67. The Plaintiffs Aver that, having reported wrongdoing on the part of Church  management that included not only misrepresentation to the rank and file Scientologists but carried with it implications of consumer and copyright fraud[10], the Defendant sought to discredit the Plaintiffs, to ruin their good names, to defame them, to hold them up to ridicule and to see to it that every Scientologist would shun them as a strategy to discredit the Plaintiffs' reports. The Plaintiffs further allege that the Defendant took this action with reckless disregard for the truth, and for the sole purpose of keeping secret their own fraudulent misrepresentations--offered through the mail and over the airwaves, to Scientologists and the public at large--which were at risk of being publicly exposed by the reports written by the Plaintiffs. 

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[1O]The Plaintiffs have conclusive and indisputable evidence of this alleged fraud which can and will be 
presented at the time of trial.

69. The Plaintiffs aver the action of the Defendant in approving the publishing and distribution "Public Warning" was done with actual malice against the Plaintiffs, and therefore "Public Warning" cannot be considered a privileged publication. 
 

70. The Plaintiffs Stephen Mitchell and Kathleen Carey hereby declare that the existence, publication and distribution of "Public Warning" by the Defendant, in wanton disregard for the truth, has exposed them to hatred, contempt, ridicule and obloquy, which has caused them each to be shunned and avoided in their personal and professional lives. 

71. The Plaintiff Stephen Mitchell hereby incorporates the Verified Statement of Demand for Damages of Stephen Mitchell in Support of the Verified Complaint for Libel as if fully restated hereinat. 

72. The Plaintiff Kathleen Carey hereby incorporates the Verified Statement of Demand for Damages of Kathleen Carey in Support of the Verified Complaint for Libel as if fully restated hereinat. 

73. Because of the malicious nature of "Public warning" the Plaintiffs hereby demand punitive damages to be assessed at trial. 
 

The Plaintiffs hereby aver in this First Amended Verified Complaint, that the actions of the Defendant are indisputably and conclusively libelous and were undertaken with wanton and reckless disregard for the truth, inasmuch as the Defendant was in possession of facts, provided to them by the Plaintiffs, that would have forestalled such actions absent malice. The Plaintiffs aver that the Defendant's actions were undertaken with "actual malice" against the Plaintiffs, as a strategy to discredit their "whistle-blower" reports, and through the use of direct statement, insinuation and innuendo the Defendant aggressively sought to defame, disgrace and degrade the Plaintiffs, their good names and reputations, after the fact of having the good names and reputations of the Plaintiffs documented and acknowledged by the Church of Scientology over an extended period of time. The Defendant must be held liable for the damages as claimed by the Plaintiffs. A trial by jury is hereby demanded and required by the Plaintiffs, and each of them. 

We, Stephen Mitchell and Kathleen Carey, hereby swear under penalty of perjury, under the law of the Land in California, one of the United States of America, that ¶¶ 1 through 73 and the Conclusion hereinabove are true and correct and so done in good faith to the best of our knowledge and belief. 

Subscribed and sworn this seventh day of the eighth month, in the year A.D. nineteen hundred ninety eight, 
 
 
 

[L.S.]____________SIGNATURE_______________seal 
Stephen Mitchell 
 
 

[L.S.]____________SIGNATURE_______________seal 
Kathleen Carey